WASHINGTON - Treasury Secretary Henry Paulson on Monday said the United States may be unable to pay its bills this fall unless Congress raises the government's borrowing authority, now capped at $8.965 trillion.
...Congress has already boosted the statutory debt limit several times during President Bush's tenure...

Bear, Lehman, Merrill Trade as Junk, Derivatives Show

On Wall Street, Bear Stearns Cos., Lehman Brothers Holdings Inc., Merrill Lynch & Co. and Goldman Sachs Group Inc., are as good as junk.
The highest level of defaults in 10 years on subprime mortgages and a $33 billion pileup of unsold bonds and loans for funding acquisitions are driving investors away from debt of the New York-based securities firms. Concerns about credit quality may get worse because banks promised to provide $300 billion in debt for leveraged buyouts announced this year.

Oil Rises Above $78, One-Year High

...However, the U.S. printed more dollars for which there was no gold backing. But the world was content to accept those dollars for more than 25 years with little question--until the French and others in the late 1960s demanded it fulfill its promise to pay one ounce of gold for each $35 they delivered to the U.S. Treasury. This resulted in a huge gold drain that brought an end to a very poorly devised pseudo-gold standard. On August 15, 1971, Nixon closed the gold window and refused to pay out any of the remaining 280 million ounces of gold; but not without devising a new system for the dollar hegemony to spread.
An agreement was struck with OPEC to price oil in U.S. dollars exclusively for all worldwide transactions. This gave the dollar a special place among world currencies and in essence "backed" the dollar with oil.
Let’s not forget Saddam’s threat to the dollar. It’s simple to understand why he had to be eliminated.
The arrangement gave the dollar artificial strength, with tremendous financial benefits for the United States. In November 2000 Saddam Hussein demanded Euros for his oil...

American Home Can't Fund Loans, May Liquidate Assets

American Home Mortgage Investment Corp. shares plunged 89 percent after the lender said it doesn't have cash to fund new loans and may have to sell off assets.Investment banks cut off credit lines, leaving American Home without money yesterday for $300 million of mortgages it had already agreed to provide.``They can't function without access to capital,'' said Bose George, an analyst with KBW Inc. in New York. ``The company either has to file for bankruptcy or go through some type of rescue or restructuring, and either way will leave almost nothing for the common shareholders.''